Opinion of Mr Advocate General Reischl

Mr President,

Members of the Court,

In 1976 the supply of cheap French agricultural alcohol led to disturbances, or threats of disturbances, on the German, Belgian, Luxembourg and Netherlands alcohol markets. The availability of cheap supplies was above all the result of the pricing policy applied by France, by means of its national alcohol monopoly.

That policy consisted in selling for export ethyl alcohol at a price which was on average both substantially below the French domestic price and below the price prevailing in the other countries referred to. In view of that situation the Kingdom of Belgium, the Federal Republic of Germany, the Grand Duchy of Luxembourg and the Kingdom of the Netherlands requested the Commission to take measures pursuant to Article 46 of the EEC Treaty, which provides that, where in a Member State a product is subject to a national market organization or to internal rules having equivalent effect which affect the competitive position of similar production in other Member States, the Member States may apply a countervailing charge fixed by the Commission with a view to redressing the balance.

At the time the Commission took the view that neither Article 37 of the EEC Treaty, which concerns State monopolies of a commercial character, nor the Treaty provisions on aids were applicable to those cheap exports; in the end, it adopted Commission Regulation (EEC) No 851/76 of 9 April 1976 fixing a countervailing charge for imports into Belgium, Germany, Luxembourg and the Netherlands of ethyl alcohol of agricultural origin produced in France (Official Journal 1976, L 96, p. 41), whereby the States in question were authorized, as from 15 April 1976, to levy a countervailing charge on French ethyl alcohol entered for home use.

Subsequently, after various amendments, that regulation was replaced by Commission Regulation (EEC) No 1407/78 of 26 June 1978 (Official Journal 1978, L 170, p. 24), which in its turn was repealed by Commission Regulation (EEC) No 841/80 of 2 April 1980 (Official Journal 1980, L 90, p. 30), when the Commission considered that France had discontinued its practice of granting aids.

On 21 April 1976, when Regulation No 851/76 was still in force, St. Nikolaus Brennerei und Likörfabrik, Gustav Kniepf-Melde GmbH, the plaintiff in the main proceedings, imported 24617 litres of fermented ethyl alcohol of agricultural origin from France into the Federal Republic of Germany. By a final notice of assessment of December 1977, in accordance with the above-mentioned regulation, the competent customs office fixed the countervailing charge payable on the imported goods at DM 11166,70.

Following an unsuccessful appeal against that decision, the plaintiff brought an action before the Finanzgericht [Financial Court] Düsseldorf against the Hauptzollamt [Principal Customs Office] Krefeld, claiming exemption from the countervailing charge on the ground that Regulation No 851/76, which was based on Article 46 of the EEC Treaty, was void inasmuch as Article 46 had become devoid of purpose after the expiry of the transitional period on 31 December 1969.

The Fourth Senate of the Finanzgericht Düsseldorf also had doubts as to the continued validity of that regulation and, by order of 8 December 1982, it stayed the proceedings and requested the Court of Justice, pursuant to Article 177 of the EEC Treaty, to give a preliminary ruling on the following question :

My view on the matter is as follows :

I — The first question

The regulation in question might be void, if at the time of its adoption, more than six years after the end of the transitional period provided for in the Treaty, it was no longer possible on the basis of Article 46 of the EEC Treaty to authorize the Member States concerned to levy such countervailing charges. Although on the face of it the question refers merely to the duration of the validity of Article 46, the grounds of the order requesting a preliminary ruling show that the national court wishes to know whether the Commission could on the basis of that provision authorize such charges for the purpose of countering disturbances of the market caused by unlawful conduct on the part of Member States. The national court proceeds on the assumption that the French export subsidies accorded for agricultural alcohol are legally classifiable as measures covered by Article 37 of the EEC Treaty, which should have been adjusted by the end of the transitional period, and that if that duty had been complied with, it would in fact no longer be necessary to apply Article 46 after 31 December 1969. In the view of the Finanzgericht, the validity of the regulation seems even more questionable because the Commission did not take action, in accordance with Articles 155 and 169 of the EEC Treaty, against the breach of the Treaty itself; it merely removed the effects thereof by indirect means and thus, in the national court's view, prolonged the unlawful French conduct.

Thus the first question to be decided is whether Article 46, which, as the Finanzgericlu rightly stresses, constitutes the sole legal basis for the adoption of such regulations, retains any validity at all after the expiry of the transitional period. Only if that question is answered in the affirmative will it become necessary to consider the scope of that provision.

1. As regards the duration of the validity of Article 46, I agree with the United Kingdom, the plaintiff in the main proceedings and the Commission, which have submitted observations, that the provision may in principle still retain a measure of validity, even though a schematic and teleological analysis, on the face of it, militates against its continued validity after the expiry of the transitional period.

2. In my view, it is however extremely doubtful whether, as the United Kingdom believes, the provision may still be regarded after the expiry of the transitional period as authorizing the adoption of national measures which are intended to neutralize unlawful action taken unilaterally by a Member State. It may indeed be tempting to use Article 46 to that end, since the imposition of countervailing charges is unquestionably an effective method of swiftly eliminating distortions of competition caused by unlawful conduct. However, I am extremely reluctant, to attach such a construction to the provision, principally on grounds related to the general scheme of the Treaty.

3. Thus the further question arises as to the status of Regulation No 851/76, which authorizes Member States to levy countervailing charges. As the Commission concedes, the view which it now holds is that Article 46 can no longer be regarded as a valid legal basis for the regulation. In 1976, however, the Commission reached the conclusion that, after the expiry of the transitional period, Article 37 of the EEC Treaty remained applicable only in very limited circumstances. As it had regarded French export subsidies as permissible measures under the national market organization, it did not institute proceedings for breach of the Treaty and instead, on the basis of Article 46 of the EEC Treaty, adopted the regulation in question. However, following the Court's ruling in Hansen ν Hauptzollamt Flensburg that, even after the expiry of the transitional period, Article 37 constitutes in relation to Articles 92 et seq. a fully applicable lex specialis, the Commission changed its position, and now regards those export subsidies as a form of discrimination regarding the conditions under which goods are procured and marketed, within the meaning of Article 37 (1). Therefore in April 1980 it adopted Regulation No 841/80 (Official Journal 1980, L 90, p. 30) repealing Regulation No 1407/78 (Official Journal 1978, L 170, p. 24), which had by that time replaced Regulation No 851/76 and was likewise based on Article 46. Thereafter the Commission refused to apply Article 46 in similar cases. On the basis of the view which it now holds, the Commission agrees with the plaintiff in the main proceedings that the regulation is to be regarded as invalid on the grounds set out above.

II — The second question

In the light of that conclusion the second question, which concerns the legal consequences of invalidity, requires only very brief additional comments.

Since the national court doubtless appreciates that a charge levied without any valid legal basis in principle gives rise to a right to reimbursement for the parties concerned, I share the Commission's view that the question is presumably intended to establish whether, in the event of the regulation's being declared void, there is any question of an exception to that principle. Such an exception could be based on the second paragraph of Article 174 of the EEC Treaty: the Court could apply that provision by analogy to this case, which is concerned exclusively with the past, and state that the legal effects of the regulation are definitive despite the fact that it has been declared void.

The Commission, which bases its view on the assumption that only very few importers were affected by Regulation No 851/76, argues in favour of the application thereof principally on the ground that a decision declaring it void would merely have the effect of allowing the parties concerned an unjustified competitive advantage derived solely from their unlawful conduct.

As the Commission concedes, however, the Court has hitherto made use of the facility provided for in the second paragraph of Article 174 only exceptionally, inter alia where important considerations of legal certainty have militated in favour of the continued application of the provision declared invalid. As a matter of principle I consider it wrong to have recourse to that provision in order to perpetuate an invalidated regulation to the detriment of certain parties, purely for the sake of doing justice in a single case. The continued application of an invalid regulation on the grounds advanced by the Commission would mean that the importers concerned would forfeit their right to reimbursement resulting in principle from the invalidity of the rule.

On the basis of the foregoing conclusions I therefore propose that, in reply to the question referred to the Court, it should be stated that consideration of Commission Regulation No 851/76 has disclosed no factor of such a kind as to affect its validity.

1 Translated from the German.

2 Judgment of 10 December 1974 in Case 48/74 Charmasson v Minister for Economic Affairs and Finance [1974] ECR 1383.

3 Judgment of 29 March 1979 in Case 231/78 Commission v United Kingdom [1979] ECR 1447.

4 Judgment of 20 April 1978 in Joined Cases 80 and 81/77 Société Les Commissionnaires Réunis Sàrl v Receveur des Douanes and Sarl Les Fils de Henri Ramel v Receveur des Douanes [1978] ECR 927.

5 Judgment of 10 December 1974 in Case 48/74 Charmasson v Minister for Economic Affairs and Finance [1974] ECR 1383.

6 Judgment of 29 March 1979 in Case 231/78 Commission v United Kingdom [1979] ECR 1447.

7 Judgment of 20 April 1978 in Joined Cases 80 and 81/77 Société Les Commissionnaires Réunis Sàrl v Receveur des Douanes and Sarl Les Fils de Henri Ramel v Receveur des Douanes [1978] ECR 927.

8 Judgment of 25 September 1979 in Case 232/78 Commission v France [1979] ECR 2729.

9 Judgment of 15 September 1982 in Case 106/81 Julius Kind KG ν European Economic Community [1982] ECR 2885.

10 Judgment of 10 December 1974 in Case 48/74 Charmasson v Minister for Economic Affairs and Finance [1974] ECR 1383.

11 Judgment of 3 February 1976 in Case 59/75 Pubblico Ministero v Flavia Manghera and Others [1976] ECR 91.

12 Judgment of 17 February 1976 in Case 45/75 REWEZentrale des Lebensmittel-Großhandels GmbH v Hauptzollamt Landau-Pfalz [1976] ECR 181.

13 Judgment of 17 February 1976 in Case 91/75 Hauptzollamt Göttingen v Wolfgang Miritz GmbH & Co. [1976] ECR 217.

14 Judgment of 10 December 1974 in Case 48/74 Charmasson v Minister for Economic Affairs and Finance [1974] ECR 1383.

15 Judgment of 29 March 1979 in Case 231/78 Commission v United Kingdom [1979] ECR 1447.

16 Judgment of 20 April 1978 in Joined- Cases 80 and 81/77 Société Les Commissionnaires Réunis Sàrl v Receveur des Douanes and Sàrl Les Fils de Henri Ramel v Receveur des Douanes [1978] ECR 927.

17 Judgment of 13 November 1964 in Joined Cases 90 and 91/63 Commission v Luxembourg and Belgium [1964] ECR 625.

18 Judgment of 20 April 1978 in Joined Cases 80 and 81/77 Société Les Commissionnaires Réunis Sàrl v Receveur des Douanes and Sàrl Les Fils de Henri Ramel v Receveur des Douanes [1978] ECR 927.

19 Judgment of 10 December 1974 in Case 48/74 Cbarmasson v Minister ¡or Economic Affairs and Finance [1974] ECR 1383.

20 Judgment of 15 September 1982 in Case 106/81 Julius Kind KG ν European Economic Community [1982] ECR2885.

21 Judgment of 13 March 1979 in Case 91/78 Hansen GmbH & Co. v Hauptzollamt Flensburg [1979] ECR